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United States Government IT Technology

Who's Controlling Our Vital Information Systems? 116

HangingChad writes "Gary Lyndaker talks about Janine Wedel's Shadow Elite; about how our information infrastructure is increasingly being sold off to the low bidder. Contracting in state and federal government is rampant, leaving more and more of our nation's vital information in the hands of contractors, many of whom have their own agenda and set of rules. From the article: 'Over 25 years, as an information systems developer, manager, and administrator in both state and private organizations, I have increasingly come to the conclusion that we are putting our state's operations at risk and compromising the trust of the people of our state by outsourcing core government functions.' I've seen the same thing in my years in government IT, ironically much of it as a contractor. My opinion is this is a dangerous trend that needs to be reversed. We're being fleeced while being put at risk."
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Who's Controlling Our Vital Information Systems?

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  • by giladpn ( 1657217 ) on Saturday January 23, 2010 @10:25AM (#30869450)
    There is an interesting debate going on world wide about how best to manage privatization.

    Many successful examples follow the example of government regulating the private sector, but the actual provision of the services being private.

    Just as an example, it seems education in Scandinavian countries is provided like that.

    So why is that bad for IT? It could be a good thing.
  • Re:Hard vs. Easy (Score:5, Interesting)

    by TheRaven64 ( 641858 ) on Saturday January 23, 2010 @10:27AM (#30869464) Journal
    I'm not sure how it works in the USA, but there's a bit of a catch-22 in procurement for IT systems in the UK. One of the factors that is considered important in evaluating bids is that they have a proven track record. This means that they've been awarded government contracts before, but doesn't mean that they have delivered on time, on budget, or at all. Companies like EDS, who have consistently failed, are given priority over other companies that have never been allowed to try. There are countless examples where a small business could have delivered a working system for around £1m, but EDS has been awarded £20m and still failed to actually produce anything that works.
  • by tthomas48 ( 180798 ) on Saturday January 23, 2010 @10:43AM (#30869574) Homepage

    Not to answer the broader question, but your question specifically. The difference is that the federal government is (at least somewhat) accountable to the people and has tools like the courts and freedom of information acts to get information out.

    Private corporations not so much.

  • The Jobs (Score:4, Interesting)

    by florescent_beige ( 608235 ) on Saturday January 23, 2010 @10:58AM (#30869666) Journal

    I could be totally wrong and often am, but the voices in my head say the /. spin on this speaks to working conditions more then management philosophy.

    Many of us have done early-career stints in larger organizations where we learned to our horror that technical experts are viewed as evil twits, not assets. That's why so many of us nerds of a certain age walk around with pinched pained expressions. Caused by thoughts like, why doesn't anything make any SENSE? You would think, working in technology and all, being a wizard would bring with it a certain amount of status and security. It just doesn't seem to be the case.

    It's not so much the sub vs in-house question as the management vs expert question that always seems to get answered in a predictably bad way. What's even worse, former geeks who grow up and get into decision-making positions are often i.m.experience the worst offenders, becoming the most vicious defenders of the bottom-line view of things, lording it over the rest of us who see our jobs as being to tease Mother Nature into behaving long enough to do something useful. And she's a fickle old witch.

    The big organizations who do seem to do some technology ok, the GEs, the HPs, the IBMs, well as far as I can tell they accomplish it by being practically Darwinian. They have their research chairs sure, but they succeed in business by absolutely grinding middle management into powder so that the survivors are just about sociopaths.

    I don't know, I guess in this phase of human development if a person wants to do something with love and passion it has to be a hobby. A few lucky ones might get paid for it. Everybody else chases bucks.

  • by lukas84 ( 912874 ) on Saturday January 23, 2010 @11:30AM (#30869848) Homepage

    Good teams do good work no matter who they work for.

    I'm not that sure about this. I work for an IT contractor, and if you try to do a good job you'll run into a conflict of interest, sooner or later. Typical scenario is that the sales guys from your company want to sell the customer something he doesn't really need - and then you get asked about your opinion on whether he should buy it or not.

    a) Stab the customer in the back, telling him he really needs to buy this
    b) Stab your employer in the back, telling the customer that he doesn't really need it
    c) Try to give a nonsensical answer that doesn't help the customer
    d) Refuse to comment
    e) Tell the customer he doesn't x, and instead should buy y.

    Which one is the right choice? Of course you can always construct another option like talking to your sales guys, but this might not work if his bonus is on the line. Techies don't get bonuses, so they don't care about selling stuff.

    I usually take option e), because there's always something you should do. But it's not a perfect solution, since you're basically saying your sales guys are incompetent and they should buy something else.

  • Re:Radical idea? (Score:1, Interesting)

    by Anonymous Coward on Saturday January 23, 2010 @11:49AM (#30869954)

    I guess that also makes you a right-wing extremist or an anarcho-libertarian. Isn't that what they call anyone who wants a minimal federal government that derives all of its authority and purpose from a literal, strict reading of the Constitution?

    The Libertarians would also sell off our roads to the Chinese despite the Constitution calling for federal regulation of them, so you'll need to find some other name for people wanting a literal reading of the Constitution (like "strict constructionist")

  • Even dumber (Score:5, Interesting)

    by tjstork ( 137384 ) <todd,bandrowsky&gmail,com> on Saturday January 23, 2010 @12:10PM (#30870084) Homepage Journal

    Is that ultimately, disabling an in-house government operation actually winds up raising overall costs in the long run. Initially, yeah, the venture capitalists that fund the privatization give the feds a pretty good deal, but contrary to all the babble about short sightedness, these folks are in it for the long haul. They bide their time, and let the inevitable churn of politics and government action mean a greater demand for services, which they provide.

    Seriously, right now we are spending record peacetime levels on defense, and what do we have, but only 1700 fighter aircraft for the USAF, not even 300 ships for the USN, and the whole time the contractors wave around "complexity" as if it is a magic bullet to allow brute force engineering that costs a fortune, cost overruns and bad designs papered over in "blocks".

    I point at the F-22, as exhibit A, the littoral combat ship, the next generation aircraft carrier. All of this stuff is, well, pretty feature rich, but, the F-22 needs a thousand people a pop to get it off the ground, which is insane, the LCS is now too expensive to be the disposable combat vessel it was supposed to be, and the next generation aircraft carrier is insane.

    When you are down to just -one- possible vendor for the government, at that point, you almost have to just nationalize the business.

  • by TheRaven64 ( 641858 ) on Saturday January 23, 2010 @12:42PM (#30870296) Journal

    That's exactly the point of the original poster in this thread:

    When employees incentives are not aligned with the company's goals, the goals suffer

    This holds whether the employee in question is the CEO, a system administrator, or a sales guy. The CEO's incentives are aligned with the current share price. That means that he will push for short-term profits at the expense of a longer-term future for the company. The sales guy's incentives are aligned with making a sale now, rather than building customer relations.

    There are a couple of things you can do to address this. You can defer the majority of the CEO's renumeration and have it linked to the share price 5-10 years later. To get the most money, the CEO needs to leave the company in such a state that its value will continue to increase (or, at least, not decrease) over his successor's tenure.

    You can give sales staff bonuses for indirect sales, so they get a bonus if one of your customers buys something from you in the future. You can make these cumulative, so sales to companies that the sales rep has worked with for a long time are worth more. This means that it's in his or her best interest to build long-term relationships with clients. If telling them not to buy anything today means that they'll buy more tomorrow, then the sales rep gets more money. Importantly, make sure this happens even if another sales rep takes over that client's account.

  • Re:Where's the risk? (Score:3, Interesting)

    by duffbeer703 ( 177751 ) on Saturday January 23, 2010 @01:00PM (#30870448)

    I am a state government employee who worked for several years in the private sector. By my reckoning, the distribution of incompetent people is about the same than at your average large company -- they just look different. Most state governments expanded rapidly in the 70's and 80's, so you have this massive cadre of 45-60 year olds who are burnt out and useless. Big corporate places purge the old people, replace them with clueless foreigners (working for a bodyshops that happen to be run by some Exec VP's wife in most cases), laid off corporate types who are now consulting, and recent graduates without clue.

    The real problem with government is the leadership. In the past, the professional managers blunted the effect of politically appointed executives who couldn't find their ass with both hands. Today, the corps of those professionals is in dire straits in most states, because most states did not hire and "grow" new employees in the 90's and 00's. So the smart people are retiring, only to be replaced by people who will be retiring in 3 years.

  • I also work for an IT contractor, although fairly small so I can go smack the sales guys on the head a few doors over as needed. I go for option B/E all the time. In my view, IT is kind of like a a bottomless pit you throw money into. You can throw more and more, but there is ALWAYS something else you can do. There's always an extra backup system you can add, an extra redundancy, an user experience you can improve, etc. But businesses have finite IT budgets, and all the slick sales guys in the world won't change that. So seeing as how there's a practically infinite opportunities to spend IT money in an organization that will have tangible benefits, I don't see the point in letting the sales guys get away with wasting their money. If I feel its a waste, I tell them that, and point out 2 or 3 things to them and the sales guys that should be higher priority. In my experience, the sales guys in IT are some of the most easily influenced by other salesmen I've ever met. A vendor comes through, gives a demonstration of their network appliance or software package of the week, tells them how all their customers will be knocking down the door to give them their money to buy it, and uses every tired old pitch technique in the book. The same techniques the sales guys use on their customers every day. And they buy it hook, line, and sinker. They go out and tell all their customers they have to have X, even when they themselves don't really understand what it does, but the vendors salesman told them so. Someone needs to inject some reality into the situation, or you wind up with a customer that has spent their entire budget on the latest buzzwords and their basic IT infrastructure is a disaster. Whether we spent their IT money on buzzwords, or we spent their IT money on things they needed, we still got their money. But one way leads to the customer saying at the end of the year "We spent $x on IT with you guys, and we still have tons of problems! Our PC's crash, our network is slow, our backups don't work, wtf?" and the other way leads to building a long term relationship with the customer that will keep them as our customer.

        Uncontrolled greed is the enemy of IT contracting in my mind. We are all in business to make money, but wanting to make money and being blinded by greed are very different. If every time you went to the doctor, he tried to sell you some new wonder drug you can only get from him, the first you might be inclined to believe him, after all he is the doctor, he knows more about medicine then you do. So you would buy it, and the doctor would make extra money. But when the medicine didn't make you feel better, and everytime you went back he wanted to sell you a new, different wonder drug, that THIS time would solve all your problems, pretty quickly you would find a new doctor. Next thing you know, the practice that doctor has built up over a decade is gone. The same thing for IT. Most of our customers don't know what they have, they don't understand it, they don't know what they need. They rely on us to tell them. But if we tell them lies, we will make a lot of money in the short term, but eventually they will get tired of shoveling money at us and seeing no results.

    Besides, is helping some sleazebag salesman make an extra $1000 in commission (that he would not share with you even if he saw you laying half dead in the gutter) worth your professional ethics?

  • Medicaid (Score:2, Interesting)

    by caramuru ( 600877 ) on Saturday January 23, 2010 @02:46PM (#30871250)
    I can't speak to all of the poster's comments, but I can address the Medicaid point. I have worked for over 25 years for Medicaid contractors and have done so in 14 states, so I have a pretty good perspective on the pluses and minuses of outsourcing this service. Medicaid is usually the largest line item in a state's budget. Consequently, IT and other services required to run the program are not only expensive, but highly visible. Many state bureaucracies have concluded that they do not want to risk such exposure and are willing to pay for the privilege of pointing their fingers at a contractor whenever there are problems. Most of these contracts' operational expenses pay for non-IT services such as mail room, data entry, call center, and other staff. These personnel fall into the same category as the janitors, security personnel, and others that the poster identifies. Most of these contracts require the contractor to develop at a fixed price a system for the state to be used in the operations phase of the contract. State IT units are unwilling to take on such risk and, instead, only develop systems on a cost-plus basis. Most of these contracts require the contractor to supply a minimum number of IT staff devoted to change orders, so the contractor only makes additional money when the volume of change orders exceeds the capacity of the contracted minimum of staff. Additionally, maintenance required for bug fixes is usually not a reimbursable expense. Again, contractors are required to assume risk that states will not take on. Health care administration is a rapidly changing (You cannot imagine the impact of HIPAA on health care administrators, public and private), and contractors with multiple contracts are much better able to understand the changing environment, develop solutions for the changes, and leverage experience from all of their contracts for the benefit of each individual contract. Although there are only about five contractors in this market, the competition is brutal, resulting in lower prices for states. Although it would seem that states lose valuable expertise when an incumbent contractor loses a re-bid, the reality is that people working for the old contractor tend to go to work for the new contractor.

    Are these contractors perfect? Absolutely not. I have seen failures that could only be resolved by kicking the contractor out. This is obviously painful to the contractor, but very disruptive to the state. States could save themselves this disruption by changing some of their procurement rules (e.g., the bidder with the lowest bid price exceeds a minimum technical score) that reward lower quality proposals. They could also increase the Medicaid program's performance by optimizing their end-to-end business processes prior to issuing an RFP. Many states' business processes are fundamentally broken. If you compare the head count used in a state-staffed operation vs. the head count used in a contractor-staffed operation, you often see a two- or three-to-one difference. Medicaid RFPs are notoriously ambiguous and routinely include phrases such as "including but limited to" in requirements statements. Fully modeled and documented processes generate fully developed use cases.

  • Re:Radical idea? (Score:1, Interesting)

    by Anonymous Coward on Saturday January 23, 2010 @07:53PM (#30873838)

    Glass-Steagall act was an essential bit of market regulation-- it kept the markets from being so volatile that people lost their trust in the system.

    Glass-Steagall was designed to protect mortgages and savings accounts from the usurious, predatory and risky practices of investment banks. Trust was not the issue. The issue was risk. Mortgages and savings accounts were completely protected from the likes of Morgan Stanley, Bear Stearns, et al, for nearly 50 years. It wasn't until the 1980 and 90's under Reagan, Bush & Clinton that the banking industry (led by Citibank) began successfully to lobby Congress in order systematically gut the Pecora hearings of the early 30's had determined to be in the best interests of the general population. The combination of this along with the repeal of the usury laws undid any real stability, trust didn't matter when the world was flooded with derivatives based on unsustainable mortgage agreements.

    The thing that gets me is how transparent the motivations of leadership in the Federal Reserves system seems, then and now. After all, the Fed leaders come directly from the banking and financial institutions. The President and Congress may appoint the chairman, but the you don't see anyone who else who hasn't come up through the ranks, as a loyal and successful member. Supply side economics and caveat emptor are the rallying cries that should have informed our collective level of trust and which brought us the derivatives that bankrupted Orange County, CA and nearly Iceland. Imagine, an entire country at risk because of the ridiculously complex financial instruments that allowed investment banks to leverage mortgages at 40:1 instead of the traditional ratio of 9:1 in the depository banks. By September, 2008, the banks didn't even trust each other... interbank loans and short term commercial paper had all but dried up.

    No... trust may have been a key selling point, but only in order to float stock bonuses for as long as the Moody's and Standard & Poor's ratings could remain untested.

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